The Monday Morning Quarterback /A quick analysis of important economic data released over the past week
By Elliott D. Pollack & Company
Hope you had a great 4th of July weekend!! The economy had a good pre-4th week. Initial claims for unemployment continued to decline. Job growth was good. Both the unemployment rate and the underemployment rate improved. Consumer confidence continued to improve. There was even good news on the manufacturing and construction fronts. And housing prices continued to move up at a moderate rate. Lots to celebrate here in the U.S.!!
However, things abroad aren’t looking as good as they are here in the U.S. This uncertainty comes as Greece delivered a shocking rejection to European leaders as they voted “no” to more austerity. Nobody knows what this will lead to and whether Greece will exit the European Union or not, but time is running out for Greece to secure a new deal to save its economy.
Although Greece and the Eurozone are taking a leap into the unknown this should not have much of an effect on the U.S. economy.
Arizona Snapshot
The Greater Phoenix S&P/Case-Shiller index was up 3.5% from a year ago in April and up 0.8% from March.
U.S. Snapshot
Initial claims for unemployment insurance are 10.2% below a year ago and are lower than any time since 2000.
The employment situation continues to improve. Nonfarm employment grew by 223,000 in June. This is just about in line with expectations. While April and May numbers were revised downward, the numbers were still acceptable. Gains were highest in retail and professional and business services.
Timing distortions tied to the end of the school year, which affected the number of new entrants to the labor market, appear to have pulled down the unemployment rate to 5.3% from 5.5% as the labor force shrank. The labor force participation rate dropped by 3/10 of 1% to an unusually low 62.6%.
The number of long term unemployed (27 weeks or more) declined by 381,000 to 2.1 million in June. These individuals accounted for 25.8% of the unemployed. Over the past 12 months, the number of long term unemployed has declined by 955,000.
The June Conference Board data rose sharply and is now at the highest level of the recovery. The index rose 6.8 points this month to 101.4. A year ago the index was at 86.4.
The ISM Manufacturing Index rose to 53.5 in June. This is up from 52.8 in May and down from 55.7 a year ago. Any reading above 50 indicates that the manufacturing economy is generally expanding.
June auto sales weren’t as strong as in May (the strongest month since July 2005) but they were still very strong. At 17.1 million units, they were down 3.4% from last month, but, up 1.5% from a year ago.
Construction spending rose a solid 0.8% in May. This was above expectations. Manufacturing facilities were strong. Residential construction was up moderately, but, the single family component was up a strong 11.2% over a year ago.
The S&P/Case-Shiller Home Price Index (20 city composite) was up 4.9% year over year. The index in April was up 1.1% over March. This will not only give home owners more equity in their home, but, it will pull many above negative equity status.
